{"id":8909,"date":"2020-01-13T14:23:17","date_gmt":"2020-01-13T22:23:17","guid":{"rendered":"http:\/\/calleam.com\/WTPF\/?p=8909"},"modified":"2026-01-28T15:32:13","modified_gmt":"2026-01-28T23:32:13","slug":"lidl-500m-write-off","status":"publish","type":"post","link":"https:\/\/calleam.com\/WTPF\/?p=8909","title":{"rendered":"Lidl Stiftung & Co. KG"},"content":{"rendered":"

The following entry is a record in the \u201cCatalogue of Catastrophe<\/a>\u201d \u2013\u00a0a list of failed or troubled projects from around the world.<\/p>\n

\n

Organization: <\/strong>Lidl Stiftung & Co. KG\u00a0– Germany
\nProject name :\u00a0<\/strong>eLWIS (apparently pronounced \u201cElvis\u201d in German)
\nProject type :\u00a0<\/strong>Merchandise management system – Grocery stores
\nDate :<\/strong>\u00a0Aug 2018
\nCost :<\/strong> \u20ac500m<\/p>\n

Synopsis :<\/strong>
\nWhen it comes to selling the basic commodities of life you have to be lean and efficient. The grocery industry runs on thin margins and relies on giving the customer\u00a0the right product, at the right time with as little waste as possible. When you’re dealing with perishable products you have to be nimble, organized and leverage\u00a0your business data to its maximum effect.<\/p>\n

\"\"<\/a>
LiDL – Grocery store – Creative Commons Attribution-Share Alike 4.0 International – Source: TCY<\/figcaption><\/figure>\n

The battle in the retail space is in large part fought using\u00a0IT systems as a tool. The better\u00a0your systems, the lower you can push your pricing and the more market share you can grab. In Europe low cost grocery chains have reshaped the grocery business and at the forefront of that transformation\u00a0has been Germany’s Lidl\u00a0Stiftung & Co (Lidl).<\/p>\n

To maintain\u00a0their lead, Lidl decided to replace their aging legacy systems with a new SAP based state of the art merchandise management system. Unfortunately reports\u00a0indicate an apples to oranges difference between the basic software design and\u00a0Lidl’s business model. As such the system had to undergo significant redesign, customization and adjustment to meet the requirements. Reporting from Consultancy.uk<\/a> indicate that -“Lidl based its inventory management system on purchase prices. The standard SAP for retail software uses retail prices, and fearing the group could lose a competitive edge by compromising, Lidl declined to change, so the software was instead adapted.”<\/p>\n

Customize package software to fit your needs may be easy\u00a0or it may be hard.\u00a0The degree of difficulty, depends on\u00a0the so called ‘requirements gap’ (i.e. the difference between what the existing package is capable of and what you want it to do). The smaller the gap the easier the project, the bigger the gap the more challenging the project becomes. A\u00a0requirements gap can be addressed\u00a0in a number of different\u00a0ways;<\/p>\n

    \n
  1. You\u00a0change your business processes to match what the software\u00a0can do<\/li>\n
  2. You customize\u00a0the software to\u00a0match your business processes<\/li>\n
  3. You can meet in the middle (i.e. do a bit of both – change the software and change the business processes).<\/li>\n<\/ol>\n

    All\u00a0have their challenges, but by deciding to keep their processes as is, Lidl took on the challenge of making a system do something it was not originally designed to do. Despite going live in 2015, Lidl\u00a0has now found the it wasn’t a ‘requirements gap’ they had in front of them, instead it was a ‘requirements chasm’. Despite having spent\u00a0\u20ac500m, Lidl has apparently come to the conclusion that their business objectives can’t be met.\u00a0ComputerWeekly<\/a> magazine reports that “a\u00a0memo sent by the head of Lidl, Jesper Hoyer, to staff stated that the strategic goals as originally defined by the project could not be achieved without the retailer having to spend more than it wanted”. Lidl will apparently be returning to their old legacy systems for now.<\/p>\n

    \u20ac500m is one heck of a lesson to learn, but good for Lidl’s management team for eventually recognizing that their plan was not going to achieve what they wanted to achieve. I know of many management teams that wouldn’t have the nerve to step up and admit that.<\/p>\n

    Related stories:<\/strong><\/p>\n

      \n
    1. HealthSMART \u2013 Victoria<\/a>\u00a0\u2013\u00a0Again a package software project with a large requirements gap<\/li>\n
    2. London Stock Exchange \u2013 Taurus<\/a> – A blast from the past to illustrate that this issue is nothing new.<\/li>\n<\/ol>\n

      Contributing factors as reported in the press:
      \n<\/strong>Forcing a square peg into a round hole (system capabilities and business processes poorly aligned). Inappropriate\u00a0product choice. Underestimation of complexity.<\/p>\n

      Reference links:<\/strong><\/p>\n

        \n
      1. Lidl dumps \u20ac500m SAP project<\/a><\/li>\n
      2. Lidl cancels SAP introduction having sunk \u20ac500 million into it<\/a><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

        The following entry is a record in the \u201cCatalogue of Catastrophe\u201d \u2013\u00a0a list of failed or troubled projects from around the world. Organization: Lidl Stiftung & Co. KG\u00a0– Germany Project name :\u00a0eLWIS (apparently pronounced \u201cElvis\u201d in German) Project type :\u00a0Merchandise management system – Grocery stores Date :\u00a0Aug 2018 Cost : \u20ac500m Synopsis : When it […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,3,77],"tags":[138,97,100,132,129,93,147],"class_list":["post-8909","post","type-post","status-publish","format-standard","hentry","category-private-sector","category-failed-project","category-why-projects-fail","tag-causes-of-failure","tag-examples-of-failed-it-project","tag-examples-of-failed-projects","tag-private-sector","tag-failed-project","tag-why-do-projects-fail","tag-why-projects-fail"],"_links":{"self":[{"href":"https:\/\/calleam.com\/WTPF\/index.php?rest_route=\/wp\/v2\/posts\/8909","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/calleam.com\/WTPF\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/calleam.com\/WTPF\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/calleam.com\/WTPF\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/calleam.com\/WTPF\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8909"}],"version-history":[{"count":26,"href":"https:\/\/calleam.com\/WTPF\/index.php?rest_route=\/wp\/v2\/posts\/8909\/revisions"}],"predecessor-version":[{"id":9968,"href":"https:\/\/calleam.com\/WTPF\/index.php?rest_route=\/wp\/v2\/posts\/8909\/revisions\/9968"}],"wp:attachment":[{"href":"https:\/\/calleam.com\/WTPF\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8909"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/calleam.com\/WTPF\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8909"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/calleam.com\/WTPF\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8909"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}